In General,if a Consumer Good Is Produced Domestically and Consumed

question 126

Multiple Choice

In general,if a consumer good is produced domestically and consumed domestically,a decrease in its price will have which of the following effects?

• A)The consumer price index will decrease relatively more than will the GDP deflator.
• B)The consumer price index and the GDP deflator will decrease by the same amount.
• C)The consumer price index will decrease relatively less than will the GDP deflator.
• D)One cannot generalize about the decrease in the consumer price index relative to the decrease in the GDP deflator.

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Definitions:

Labor Force

The total number of people employed and unemployed, actively seeking employment in an economy.

Production Possibilities Frontier

A curve depicting the maximum output of two goods that can be produced with given resources and technology, assuming all resources are fully utilized.

Improvement In Technology

Enhancements or advancements in technology that increase productivity or efficiency, often leading to economic growth.

Annuity Due

An annuity for which the payments are made at the beginning of each period, as opposed to the end in a regular annuity.